finds Cummins has acted in good faith during the litigation of this case and, therefore, should receive prejudgment interest.
Under this standard, this court awards prejudgment interests to Cummins at the prime rate compounded annually for the period of infringement to the date of this court's judgment. Cummins will submit its prejudgment interest calculations within ten days of the date of this judgment. These calculations should include updated interest on the jury damage award as well as interest on damages for the update period and for the Mach 8.
Cummins requests this court to increase the damages by up to three times. Enhanced damages deter willful patent infringement by punishing the willful misconduct. Avia Group Int'l Inc. v. L.A. Gear Calif., Inc., 853 F.2d 1557, 1566, 7 USPQ2d 1548, 1555 (Fed. Cir. 1988). Pursuant to 35 U.S.C. § 284, a district court has discretion to award enhanced damages. See, e.g., Underwater Devices Inc. v. Morrison-Knudson Co., 717 F.2d 1380, 1390, 219 USPQ 569, 576-77 (Fed. Cir. 1983). In exercising this discretion, this court should consider: "(1) whether the infringer deliberately copied the ideas or design of another; (2) whether the infringer, when he knew of the other's patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed, and (3) the infringer's behavior as a party to the litigation." Bott v. Four Star Corp., 807 F.2d 1567, 1572, 1 USPQ2d 1210, 1213 (Fed. Cir. 1986).
In the September 1991 trial, the jury determined that Brandt willfully infringed Cummins' patents. In making that determination, the jury had before it evidence that Brandt's management worried that Cummins' new coin sorter would take the lead in the market. The jury had evidence that one Brandt district manager wrote to Brandt's management expressing serious concern that Brandt could not compete with Cummins' new technology. PX-105, 129. The jury also examined closely and heard repeated references to a memorandum referring to an order from Brandt's management to produce "a Chinese copy of the Cummins JetSort." PX-129. Finally, the jury examined Brandt's accused product to determine if Brandt was guilty of copying.
In reaching its determination, the jury did not consider legal opinions prepared by Brandt's patent counsel, Mr. Thomas W. Ehrmann. When Brandt proffered this evidence, Mr. Ehrmann had already been extensively involved in presenting Brandt's case to the jury. To avoid the difficulties of permitting trial counsel to testify, this court reserved for its own review Mr. Ehrmann's opinions to Brandt management.
After considering all evidence, including Mr. Ehrmann's opinions, this court declines to award enhanced damages. This court exercises its discretion based on the following evidence. First, Brandt sought and followed oral and written opinions of competent counsel about Cummins' patents many years before Cummins marketed its JetSort in 1983. DX-123. See American Original Corp. v. Jenkins Food Corp., 774 F.2d 459, 465, 227 USPQ 299, 302-03 (Fed. Cir. 1985). Brandt continued to seek legal advice up to the time Cummins filed its initial complaint. DX-155, 169, 171, 173, 190. The opinions specifically address the patents involved in this lawsuit. The opinions show that Brandt sought legal advice from at least two law firms. The opinions advised that Cummins' patents had vulnerabilities to an invalidity attack and that Brandt's products did not infringe. The opinions of counsel carefully considered the patents themselves as well as their prosecution histories.
Second, Brandt evinced its confidence in its attempt to design around Cummins' patents by filing a patent application of Adams and Winkelman on March 27, 1987, for a "Resilient Disk Coin Sorter." DX-173. See King Instrument Corp. v. Otari Corp., 767 F.2d 853, 866-67, 226 USPQ 402, 411-12 (Fed. Cir. 1985), cert. denied, 475 U.S. 1016, 89 L. Ed. 2d 312, 106 S. Ct. 1197 (1986); State Indus. v. A.O. Smith Corp., 751 F.2d 1226, 1236, 224 USPQ 418, 424 (Fed. Cir. 1985); Amstar, 823 F.2d at 1546-47.
Finally, Brandt has acted in good faith during the course of this litigation. It presented its defenses to allegations of patent infringement in an aggressive yet fair manner. Brandt advanced no frivolous arguments. Most important, Brandt, without intervention of this court, unilaterally withdrew its products from the market upon receipt of the jury's verdict. Based on these circumstances, this court declines to award enhanced damages.
Cummins claims attorney fees pursuant to 35 U.S.C. § 285. According to the statute, this court may award reasonable attorney fees to the prevailing party in "exceptional cases." This court finds nothing exceptional about this case in the meaning of section 285. Brandt has not acted or espoused positions frivolously. For many of the same reasons this court denied enhanced damages, it also denies Cummins' request to award attorney fees.
In accordance with the foregoing opinion, this court awards plaintiffs the following damages:
(1) $ 5,338,973 for Mach 10 infringement occurring between May 1988 and March 1989. This figure is the total of the jury's damage award, $ 3,894,000, plus interest. By order of this court, the parties shall recompute the interest on $ 3,894,000 to account for the date of this judgment.
(2) $ 4,458,023 for Mach 10 infringement during the update period - April 1989 to September 1991.
(3) $ 771,515 for Mach 8 infringement.
The parties shall calculate interest on these amounts and report a total amount of damages to this court in accordance with its instructions.
IT IS SO ORDERED.
Randall R. Rader, Circuit Judge